Functions of Financial Accounting
The function of Financial Accounting is the process of preparing company’s financial statements to show its financial position to customers, suppliers, creditors and investors. Unlike financial Accounting, General ” Management” Accounting is designed for managers to help them make company’s future plans and decisions. Financial Accounting is an administrative tool to verify the company’s transactions and financial state and to facilitate communication between different parties and partners in the company.
Financial accounting aims to identify and record all accounting transactions associated with the expenses and products, on the other hand, it periodically and regularly evaluate all assets and liabilities. Most companies make quarterly and annual financial statements. Such as:
Net income is calculated by subtracting expenditures from revenues. According to accounting principles, revenue is recorded on the period of goods and services sales, which doesn’t necessarily correspond to the period of the monetary value of what was sold.
It reports entity’s assets and liabilities, with full statement of company’s property and all of the entitlements at the end of the accounting period. To evaluate assets, all entitlements is added to shareholders equity, it consists of the money they reinvested and retained earnings that haven’t been distributed.
It’s a financial statement that shows the actual changes of the company’s cash flow set to a period of time. Unlike net income in the contingency table which is a non-monetary number, Cash-flow statement shows all the cash flow from financial, investing and operating activities.
Retained Earnings statement
It shows all the earnings that been left over for the business, retained for a certain period of time and what’s been dividends to its shareholders.
What Corporate Accounting System add to you
Link IT accounts and stock control system is considered a very precious tool for the companies working with all its different managements and financial accounting operations such as ( human resources, manufacturing, sales, stocks …) to be able to monitor its financial state every single day, this system helps to improve and facilitate the working process fundamentally through:
Different tasks management completion.
Alert to adjust what’s messing in the process of accounting data entry with making sure no duplicates.
Accounting documents centralization.
Link IT erp system includes, accounts control, monitoring company’s financial state and accounting data entry. It also allow for copying all financial changes which affect all company’s selling, buying activities and value-added tax, through this system future planning, audit, and financial tracking can be done easily.
Link IT ERP Software consists of 5 key components:
• General accounts
This part of the system is considered one of the best accounting entitles component in the company which runs all the finances through presenting accurate and important data after collecting all journal entries from the system to help managers make the right decision on the required time. Public accounts consist of: Ledger, Subsidiary Ledger, Trial Balance, Income Summary Account, Income Statement and Fixed-Asset management.
According to every section as follows:
• The Balances is being accrued during a specific period of time in the General Ledger, including, Receivables and Payables, Expenses, Liabilities, and Asset accounts.
• Presenting a more detailed movement of assets from the General Ledger according to bills and checks, which allow for a more detailed follow-up .
• Making financial accounting different reports to disclose and evaluate company’s profits over a certain period of time such as, financial position statement and profit and loss statement, …
• Trial Balance preparation which includes company’s debtor and creditor accounts, to allow for errors detection and inputs validation.
• Receivables and Payables and Visa management for accounts, suppliers and customers, Revenues and Expenses in addition to payments.
• Receivables and Payables ”checks” registration and monitoring, with Accounting reports and Bank Statement checking possibility.
• Fixed-assets special account establishment each one individually, all required asset data is provided, asset value, age, depreciation and asset’s carrying amount.
This link IT erp software part works on running warehouses different activities including identifying items in stock, re-ordering point, valuing the inventories, inventory cost estimation, stocktaking, issuance of reports about required purchases amount, quantities transferred and sold, vouchers, goods transportation and a variety collection of detailed and accurate warehousing reports.
In addition to manufacturing process, including bill of material, which is to accurately supply raw materials to manufacturing section according to targeted production to avoid any material waste or impotence. and to register all different items with its stock data, every supplier for every item and all company’s customers with all their ordering data.
The importance of this part of Link-It erp system is indicated in its ability to run company’s sales simply and professionally, through it you can inter unlimited number of products and to monitor and track all its different processes, in addition to being linked directly with inventory management, warning notifications will be sent every time any product is lower than the selected quantity.
Through sales unit you can easily generate invoices and adding value-added tax, create price quotation and sales orders for customers, and to monitor sales and all sales volume, or product-by-product sales volume through the provided reports from the system.
This part is in charge of various procurement process and transactions with suppliers and accurately assessing company’s needs both quantitatively and qualitatively for much easier cost control and more enhanced procurement, supplying and payment strategy.
• Human Resources
This part is generally responsible of running all human resources processes, and particularly for personal matters, it includes:
• Create a record for each employee or worker in the company that includes all of his working and personal data.
• Management of attendance, absences and leave requests, in addition to recording overtime and working hours delay.
• Loans and advances follow-up.
• Personnel evaluation.
• Vocational training courses and promotions administration.
• Payroll making and follow-up with entitlements, bonuses, deductions and taxes added to the accounts.
Link IT ERP System importance
The monitoring of company’s different activities is an imperative need to be able to control organization’s performance and profitability and for making the right managerial decisions. Link-it erp system allows that through an efficient system providing several organized and accurate solutions: which is deemed important in:
• A designed tool to match your business’s activity and size.
• Manage company’s various activities accurately.
• Work completion in very short time.
• Cost Control
• Provide detailed and careful reports for various activities.
• Adding value-added tax automatically to company’s accounts.
• Manage accounting processes in line with the changing needs of the company.
• Ensure accounting principles compliance and facilitate audits.
• Accounting data management, observation and security insurance in company.
Link IT erp system is an integrated system allows you to run all your company’s accounts and complicated various activities easily. It helps to improve the organization’s performance, enabling you to control different costs more effectively, which makes it the first element for informed strategic decisions.